States With Lowest Taxes 2020

We’ve all heard the adage, “Nothing is certain except death and taxes.” We all know that we have to pay taxes if we live in the United States, but did you know that some states have lower tax rates than others? Some states also may eliminate certain taxes, but often, they’re merely paying more in other types of taxes.

Adult citizens in the United States pay a variety of different taxes. We pay taxes to the federal government. We also pay local and state taxes. It isn’t just your annual state tax return, either. We pay property taxes, sales taxes, and other taxes that help fund things like schools, roads, and critical infrastructure.

Because there are so many different types of taxes, there isn’t just one list of states with the lowest tax rates. For example, property tax in one state may be much lower but personal income tax may be much higher. But we can break down the states with the lowest taxes based on tax type.

In 2018, it was found that Louisiana had the lowest property tax rate at 0.18%. Hawaii came in second with a property tax rate of 0.26%. Alabama has the third-lowest property taxes at 0.33%.

The top 10 states with the lowest property tax rates in 2018 were:

When it comes to states with the lowest personal income tax rates, there are several that top the list because they have no personal income tax. Those states are:

When it comes to sales tax, five states do not have charge sales tax. Those states are:

It’s important to note that local municipalities in Montana and Alaska can impose a sales tax.

The organization Tax Foundation released a report in 2018 that evaluated local taxes to determine which states were the most tax-friendly. This report showed that the states with the lowest taxes were:

  • Alaska
  • South Dakota
  • Wyoming
  • Tennessee
  • Texas
  • Louisiana
  • New Hampshire
  • Nevada
  • South Carolina
  • Mississippi
*Tax Rate (%)
* Rank based on normalized and combined rates for single filers with no dependents or deductions. Income tax is weighted 70%; sales tax at 30%.
State Tax Rank Income Tax Sales Tax Property Tax (per $100K)
New Hampshire10.00%0.00%$2,296
Alaska20.00%0.00%$1,432
Wyoming30.00%4.00%$635
South Dakota40.00%4.00%$1,388
Florida50.00%6.00%$1,041
Texas60.00%6.25%$1,993
Washington70.00%6.50%$1,125
Nevada80.00%6.85%$693
Tennessee90.00%7.00%$768
North Dakota103.22%5.00%$894
Pennsylvania113.07%6.00%$1,674
Colorado124.63%2.90%$607
Indiana133.40%7.00%$907
Delaware146.60%0.00%$604
Alabama155.00%4.00%$432
Michigan164.25%6.00%$1,729
Montana176.90%0.00%$892
Arizona184.54%5.60%$754
Utah195.00%4.70%$713
New Mexico204.90%5.13%$830
Oklahoma215.25%4.50%$974
Kansas224.80%6.50%$1,491
Virginia235.75%4.30%$858
Illinois245.00%6.25%$2,408
Louisiana256.00%4.00%$555
Georgia266.00%4.00%$1,000
Missouri276.00%4.23%$1,026
North Carolina285.80%4.75%$894
Ohio295.39%5.75%$1,641
Massachusetts305.20%6.25%$1,294
Mississippi315.00%7.00%$862
Maryland325.75%6.00%$1,125
Kentucky336.00%6.00%$925
Rhode Island345.99%7.00%$1,723
West Virginia356.50%6.00%$615
Nebraska366.84%5.50%$1,855
Connecticut376.70%6.35%$2,114
South Carolina387.00%6.00%$601
Arkansas397.00%6.50%$658
Wisconsin407.65%5.00%$615
Oregon419.90%0.00%$1,121
Idaho427.40%6.00%$796
Maine437.95%5.50%$1,424
New York448.82%4.00%$1,812
Washington DC458.95%5.75%$603
Vermont468.95%6.00%$1,908
Iowa478.98%6.00%$1,678
New Jersey488.97%7.00%$2,530
Hawaii4911.00%4.00%$304
Minnesota509.85%6.88%$1,224
California5113.30%7.50%$841